Ramesh Damani is fondly referred to as the “Nawab of Dalal Street” because of his vision and clairvoyance in being able to see the future.
He was amongst the first to recognize the potential of stocks like Infosys, TCS and HCL when they were still in their infancy.
“We have made 50x, 100x in these stocks” Damani said, much to the delight of Menaka Doshi, the charming and effervescent journalist who has defected from CNBC TV18 to Bloomberg.
However, the business model of these behemoths is under threat due to automation, competition, slowdown in IT spends etc and they are no longer in the position to give mega gains to shareholders, the veteran investor warned.
When Menaka pressed him to explain further, Ramesh Damani disclosed that he is now bullish about “product-oriented companies”.
“There are a lot of companies catering to vertical markets, building products in knowledge, database, antivirus. They offer some very attractive opportunities to investors and they are available at fairly cheap valuations” Damani said.
“There are maybe half a dozen on Dalal Street now that have exciting balance sheets, exciting prospects, and probably deserve a lot of investor attention” he added.
Menaka’s journalistic instincts kicked in. She knew she was on the cusp of a big revelation from Ramesh Damani.
“If our research is correct, you’d invested in companies such as Polaris, Geometric, Sonata. Are you still adding to such investments?” she asked gently and in a deliberately tentative manner.
Ramesh Damani warmed to the theme. “Polaris spun off a nice looking product company which I own” he said.
Damani is obviously referring to Intellect Design Arena which was de-merged from Polaris in October 2014.
Intellect Design Arena happens to be a favourite of Rakesh Jhunjhunwala, the Badshah of Dalal Street. As of 30th June 2016, the Badshah (together with wife Rekha) held 60 lakh shares of IDA worth Rs. 124 crore at the CMP of Rs. 207.
“There are a lot of others …. I am fairly excited about these companies because they address very good opportunities” Damani added.
Menaka realized she had struck gold and that Ramesh Damani was in the mood to sing. She did what every journalist should do in these circumstances – keep quiet.
Damani next gave the example of an Indian company which built the Aadhaar database. “That’s a huge technological achievement …. They have 100 crore people on the database” he said with awe in his voice.
Here, Ramesh is probably referring to HCL Infosystems, which was in the news for being awarded a massive contract by UIDAI for managing the Aadhar database.
It is worth noting that Radhakishan (Gopikishan) Damani, the legendary Billionaire investor, and Prof. Shivanand Mankekar, are investors in HCL Infosystems.
Ramesh Damani also made reference to an “Antivirus software company”.
The reference is obviously to Quick Heal Technologies. Ramesh has earlier referred to Quick Heal as the ideal amalgamation of “Make in India” and “Internet Boom”.
These companies “make me excited as a technology investor” Ramesh Damani gushed, sending the clear message to us that some amongst these micro and small-caps will become the next Infosys and TCS and generate incalculable wealth for their lucky shareholders!